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Family pleads guilty for using Texas BHPH dealership to launder gambling proceeds

Thursday, Jul. 11, 2019, 10:36 AM

By BHPH Report Staff

BEAUMONT, Texas -

The Justice Department received guilty pleas from an east Texas buy-here, pay-here dealer, his wife and son in connection with a scheme to use the dealership as a cog in an illegal gambling machine that lasted more than 30 years.

The trio pleaded guilty to federal violations in a case investigated by Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation, and prosecuted by assistant U.S. Attorneys Christopher Tortorice and Joseph Batte.

According to a news release from the Justice Department, Larry Tillery, Judy Tillery and Brian Tillery, all of Beaumont, appeared in federal court on June 25 before U.S. Magistrate Judge Keith Giblin to enter their pleas to an Information.

According to information presented in court, Larry Tillery was engaged in the business of accepting illegal wagers on sporting events from 1985 until April 2017, and was his primary occupation during that time. Tillery owned and operated Daylight Motors, an independent dealership, and Lamar Capital, the store’s related finance company. Officials said Tillery used these two companies as a front to launder illicit proceeds from his illegal gambling enterprise.

The Justice Department indicated Tillery used a website to receive and track wagers from his betting clients, allowing his bettors to place wagers on sporting events, including professional and collegiate basketball, baseball and football games.

Officials continued that Judy Tillery assisted her husband in laundering cash proceeds of his illegal bookmaking activities by depositing cash into her personal bank account at Beaumont Community Credit Union in Beaumont, Texas, and then writing checks to bank accounts controlled by her husband. Judy Tillery structured these cash deposits in amounts less than $10,000 in an attempt to evade federal currency transaction reporting requirements.

DOJ went on to explain Brian Tillery aided the bookmaking enterprise by:

— Collecting money from sports bettors and making payments to bettors on behalf of his father

— Checking the online wagers on a regular basis to keep Larry Tillery aware of what bets were placed on which games

— Mailing packages of currency in excess of $10,000 via the United States Postal Service at the request of Larry Tillery, which was derived from illegal gambling activities.

“Larry Tillery knew that despite the fact that he was violating Texas state and federal law, federal law nonetheless required him to register as a bookmaker with the Internal Revenue Service and to file monthly excise tax returns to report total wagers he accepted during the month,” the Justice Department said.

“Tillery also knew that he was required to pay gross wagering excise taxes of 2% on wagers he accepted each month. But, Tillery failed to report or pay any taxes to the IRS based on the wagers he accepted each month,” the agency continued.

During September through November of 2016, officials said Larry Tillery accepted at least 450 wagers totaling $5,060,150. These wagers are subject to the 2% federal gross wagering excise tax and Larry Tillery evaded gross excise wagering taxes of $29,717 in September 2016, $34,423 in October 2016 and $37,063 in November 2016 for a three-month total of $101,203.

Between 2011 and 2016, the Justice Department said Tillery accepted at least $52 million in illegal wagers on sporting events. Officials noted Tillery did not report these wagers to the IRS or pay gross excise taxes.

Officials calculated the gross wagering taxes that resulted from wagers Larry Tillery accepted between 2011 and 2016 total $1,040,000. They added this tax due figure includes $101,203 in gross wagering excise taxes for wagers accepted in September through November 2016.

The investigation traced a total of 125 financial transactions in excess of $10,000 derived from illegal gambling that utilized the United States banking system. These financial transactions totaled more than $32 million between 2010 and 2016.

As part of the plea agreement, the Justice Department said Larry and Judy Tillery agreed to forfeit $1,738,455 in cash seized during the investigation, numerous luxury watches and pieces of jewelry and several professional sports memorabilia items.

They also agreed to a money judgment of $32,758,541, representative of illegal wagers the Tillery sports gambling enterprise during the relevant time period.

“The Tillerys ignored state and federal gambling laws and profited tremendously from a criminal enterprise,” U.S. Attorney Joseph Brown said. “We intend to collect every bit of the money judgment that will be issued against them, and we expect Larry Tillery’s prison sentence to send a message to those who profit from illegal bookmaking.”

Under federal statutes, Larry Tillery faces up to 10 years in federal prison. Judy Tillery and Brian Tillery each face up to five years in federal prison.

The maximum statutory sentences prescribed by Congress is provided her for information purposes, as the sentences will be determined by the court based on the advisory sentencing guidelines and other statutory factors.

Officials said sentencing hearings will be scheduled after the completion of presentence investigations by the U.S. Probation Office.

“For more than 30 years this family operated one of the largest illegal sports gambling and money laundering operations in the U.S.,” said Assistant Special Agent in Charge (ASAC) Mary Magness, Homeland Security Investigations (HSI) Houston. “Today’s pleas underscore HSI’s commitment to aggressively investigate financial crimes and bring offenders to justice.”

As part of his plea agreement, Brian Tillery agreed to forfeit $241,176 in U.S. currency seized during the investigation and a residence valued at approximately $600,000 located on Christina Court in Beaumont. He has also agreed to a money judgment of $700,000.

“Concealing or transferring assets in an attempt to evade taxes is a crime, and IRS-CI is committed to prosecuting individuals that do so,” said Rusty Lee, Assistant Special Agent in Charge, IRS Criminal Investigation.